AFC Energy plc (AIM: AFC.L), the industrial fuel cell power company, is pleased to announce that it has signed a Heads of Agreement with a global manufacturing partner for the international procurement and manufacture of its leading alkaline fuel cell systems.

The Heads of Agreement sets out the basis of a proposed manufacturing services agreement, the terms of which will be negotiated over the coming months with AFC expecting to make an announcement on the final terms of the deal thereafter.

The prospective manufacturing partner has global reach, is widely regarded as a world leading manufacturing services company, and will offer manufacturing support to AFC, and to support value engineering, manufacturing process optimisation and therefore cost reduction through a competitive procurement of the supply chain and leveraging the network and existing infrastructure.

Mr Adam Bond, AFC’s Chief Executive Officer, said: “Having met representatives from our prospective manufacturing partner on their visits to our Surrey-based head office, I’m confident in our ability to close a deal that will reflect the mutual opportunity for both parties in taking this transaction forward, and in their capability to deliver on AFC’s aggressive growth trajectory envisaged over the coming five years as we progress towards our targeted 1GW of power generation in place or under development by 2020.”

Mr Bond further commented: “Whilst I expect negotiations on a manufacturing services agreement to progress over the coming weeks and months, I believe the signing of the Heads of Agreement is further validation of the global interest being shown in fuel cell technology generally, and specifically in AFC’s offering and positioning within this international market.”